Indian Airlines Cut Diwali Capacity as Fuel Costs Surge

Indian airlines reduced flight capacity by approximately 6% across October and November, marking the first decline in Diwali-season flights since the 2020 pandemic. This pullback has caused ticket prices to surge, with some one-way fares reaching levels previously seen for round-trip tickets.

IndiGo, the country's largest carrier, reduced its capacity by 1% and reported a loss of 18.8 billion rupees. The industry is facing mounting financial pressure driven by a 67% jump in fuel costs for IndiGo, a weaker rupee, and longer international flight paths resulting from airspace restrictions.

Despite a 6.5% drop in domestic passenger traffic during September, airline leadership maintains that the market remains stable. IndiGo CEO Willie Walsh stated that demand had held up "reasonably well," as the company attempts to balance passenger affordability with financial stability.